Between:

K.Ramana Setty,

S/o Maldakantaiah Setty,

Propritor of Sri Guru Raghavendra Auto Xerox and Book Stall,

Opp: M.R.O. Office,

Mantralayam Post,

Kurnool District.                                                                 …Complainant

                                       -Vs-

1.State Bank of India,

   Represented by its Branch Manager,

   Mantralayam Branch,

   Mantralayam Post,

   Kurnool Distirct.

2. M/S New India Assurance Company Limited,

   Represented by its Branch Manager,

   D.No.19/19, 20/21,

   Municipal Main Road, Adoni Post,

   Kurnool District.                                   ...Opposite ParTies

This complaint is coming on this day for orders in the presence of Sri D.Kumara Swamy, Advocate for complainant and Sri M.Parameshappa, Advocate for opposite party No.1 and Sri P.Ramanjaneyulu, Advocate for opposite party No.2 and upon perusing the material papers on record, the Forum made the following.

  ORDER

(As per Sri. M.Krishna Reddy, Male Member)

   C.C. No. 99/2010

1.     This complaint is filed under section 12 of C. P. Act, 1986 praying:-

(a)          To direct the opposite parties to pay insured, insurance amount  of Rs.3,00,000/- with interest; Rs.10,000/- for mental agony as the complainant suffered lot for the last 5 months and costs of the complaint; and grant further reliefs as the Honourable Forum deem fit and proper in the circumstances of the case in the interest of justice;

2.    The case of the complainant in brief is as under:- The complainant is the proprietor of Sri Guru Raghavendra Auto Xerox and Book stall situated in Mantralayam Village.   The complainant obtained loan of Rs.3,00,000/- from opposite party No.1.  Opposite party No.1 paid insurance premium to opposite party No.2 for coverage of shop keeper risk for Rs.3,00,000/-.   Opposite party No.2 issued the policy for the year 2009 – 2010.  In the floods took place from 30-09-2009 to 3-10-2009 the shop of the complainant was totally damaged and the complainant sustained total loss.  The complainant informed about the same to the opposite parties.  The insurance surveyor appointed by opposite party No.2 came and inspected the shop of the complainant and submitted the report to opposite party No.2.  Inspite of several demands opposite party No.2 did not settle the claim.  Finally in the month of March the complainant received a letter from opposite party No.2 stating that the claim was closed for the reason that the policy covers the risk from 8.33 hours on 02-10-2009 and the floods started from 30-09-2009. By evening on 01-10-2009 the Mantralayam Town was inundated.  Loss of the stock is prior to risk.  The repudiation of the claim by opposite party No.2 is illegally.  There is deficiency of service on the part of opposite parties.  Hence the complaint.

3.     Opposite party No.1 filed written version stating that the Bank sanctioned loan of Rs.2,00,000/- to the complainant.  The complainant executed agreement of loan cum hypothecation for Rs.2,00,000/-.  On 01-10-2009 opposite party No.1 has debited a sum of Rs.1,511/- in personal account of the complainant towards insurance premium amount.  On the same day the draft was handed over to the clerk of opposite party No.2 at about 8.00 P.M. through its business facilitator by name U.Veeresh.  The clerk of opposite party No.2 handed over the said Demand Draft in the officer of opposite party No.2 on 02-10-2009 at 8.30 A.M. though it was declared as public holiday.   Opposite party No.2 has accepted all the premium receipts.  Opposite party No.2 has encashed the demand draft on 06-10-2009 without any objection.  The floods hit at Mantralayam and surrounding Village on early hours of 02-10-2009 only but not in the evening of 01-10-2009.  It is impossible to predict severe floods by any person.  The contention of opposite party No.2 that the policy covers the risk from 8.33 hours on 02-10-2009 where as the floods started from 30-09-2009 and by evening of 01-10-2009 the Mantralayam Town was immersed in floods is false.  The final decision of opposite party No.2 is illegal.  Opposite party No.1 forwarded the policy amount of the complainant to opposite party No.2 on 01-10-2009 before the flood.   It is the duty of opposite party No.2 to settle the claim of the complainant.  The complaint is liable to be dismissed.

Opposite party No.2 filed counter admitting that the shop of the complainant was insured by it for the period commencing on 02-10-2009 at 8.33 A.M. to 01-10-2009.  The previous policy is in favour of the complainant was expired on 03-09-2009.  Due to heavy rains and floods, Mantralayam was inundated from 30-09-2009 to 02-10-2009.  After the receipt of the said information opposite party No.2 appointed an independent surveyor to assess the loss.  The surveyor assessed the net loss at Rs.1,70,000/-.  Opposite party No.2 is not liable to pay the said amount as the complainant sustained loss from 30-09-2009 onwards where as the policy came into force  from 8.33 A.M. on           02-10-2009.  The previous policy expired on 03-09-2009.   Inspite of reminders opposite party No.1 did not take action for 28 days.  The risk will commence from the date and time mentioned in the policy issued.  There are no merits in the complaint.  The complaint is liable to be dismissed.

 4.    On behalf of the complainant Ex.A1 to A4 are marked and sworn affidavit of the complainant is filed.  On behalf of the opposite parties Ex.B1 to B22 are marked.  Sworn affidavits of the opposite parties and third party affidavits of U.Veeresh and D.V.R.Chary are filed.

5.     Both sides filed written arguments.

6.     Now the points that arise for consideration are:

                     i.        Whether there is deficiency of service on the part of Opposite Parties?

                    ii.        Whether the complainant is entitled for the reliefs as prayed for?

                  iii.        To what relief?

7.      POINTS i and ii:- Admittedly the complainant is the proprietor of Sri Guru Raghavendra Auto Xerox and Book stall situated in Mantralayam Village.  It is also admitted that the complainant obtained loan of Rs.2,00,000/- from the opposite party No.1 bank.  Opposite party No.2 insurance company, issued Ex.A2 insurance policy in favour of the complainant for coverage of shop keeper for the year 2009 – 2010.   The period of the policy is at 8.33 A.M. on 02-10-2009 to 01-10-2010.   It is the case of the complainant that there were floods from 30-09-2009 to 03-10-2009, and he sustained total loss of stock in the shop.  The complainant in his sworn affidavit clearly stated that there were floods from 30-09-2009 to 03-10-2009 and due to the said floods the stock in his shop was completely damaged.  The complainant filed Ex.A4 copy of the Mantralayam Forecast, on 02-10-2009, where in it is mentioned that on 02-10-2009 the water level at Mantralayam is 318.770 meters, and at M.R.O. Office nearly 10 feet water flown on the road.  The opposite party No.1 also filed Ex.B7 certificate issued by Tahsildar, Mantralayam, where in it is mentioned that Mantralayam Village was badly affected with flood water by Tungabhadra River on 02-10-2009 at 1.00 A.M. and the water is subsided on 03-10-2009 at 5.00 A.M.  As seen from the evidence available on record it is very clear that entire town of Mantralayam was submerged in the flood water on 02-10-2009.  It is not the case of the opposite parties that the stock in the shop of the complainant was not damaged.  Admittedly on the intimation given by the complainant, opposite party No.2 appointed a surveyor and the surveyor submitted his report Ex.B12 to opposite party No.2 insurance company.   In the said report the surveyor clearly stated that the stock in the shop  of the complainant was damaged due to flood water of Tungabhadra River.  He assessed the net loss at Rs.1,70,000/-.  No satisfactory evidence is placed by opposite party No.2 that stock in the shop of complainant was damaged prior to 02-10-2009.

8.     It is the contention of the complainant that he submitted claim to insurance company and that opposite party No.2 closed the claim on the ground that the policy was not in force by the date of damage of the stock in the shop of the complainant.  Ex.A2 is the policy issued by opposite party No.2 insurance company in favour of the complainant.  It is mentioned in Ex.A2 that the policy commenced at 8.33 hours on 02-10-2009.  It is contention of opposite party No.2 that the floods started from 30-09-2009.  The date on which the stock in the complainant shop was damaged is crucial.  In Ex.B7 certificate issued by Tahsildar, Mantralayam there is no mention that the Mantralayam Town was affected in the flood water on 30-09-2009 and 01-10-2009.  There is clear mention in Ex.B7 that Mantralayam was submerged in the flood water on 02-10-2009 at 1.00 A.M.   The contention of the opposite party No.2 that the stock in the shop of the complainant was submerged prior to 02-10-2009 cannot be accepted.  Merely because there was heavy rain in the area on 30-09-2009 and 01-10-2009 it cannot be said that the stock in the shop of the complainant was damaged prior to 02-10-2009.  It is clearly stated in the affidavit filed in support of opposite party No.1 that the Demand Draft towards the premium amount was handed over to opposite party No.2 at 8.00 P.M. on 01-10-2009 through business facilitator of opposite party No.1 bank by name U.Veeresh.  U.Veeresh also in his affidavit clearly stated that he handed over the Demand Draft towards the insurance premium to opposite party No.2 at 8.00 P.M. on 01-10-2009.  Opposite party No.2 is not certain through whom it received Demand Draft. 

9.     It is submitted by the learned counsel appearing for the complainant that policy becames operative from the date of commencement.  In support of his contention he relied on a decision reported in [1995] 2 CPR 40.  The said decision was rendered basing on the Supreme Courts decision reported in New India Assurance Company Limited (Versus) Ram Dayal and others.  In the said decision the Apex Court held that when the policy is taken on a particular date its effectiveness is from the commencement of the date.   In the present case also the policy Ex.A2 commenced on 02-10-2009.  It is deemed to have commenced from 00 hours of 2^nd October. 2009.  As already stated the entire town of Mantralayam was affected with flood water on 02-10-2009.  The same is supported by Ex.B7 certificate of Tahsildar Mantralayam filed by the opposite party No.1.  The contention of the opposite party No.2 that the flood occurred prior to 02-10-2009 and that it is not liable to pay the assured amount to the complainant is not just and proper.  The complainant sustained loss of his stock due to floods on 02-10-2009 when the policy Ex.A2 was in force.  Opposite party No.2 without any justification closed the claim of the complainant.  As already stated the surveyor in his report Ex.B12 assessed the net loss at Rs.1,70,000/-.  Opposite party No.2 is liable to pay the said amount to the complainant. 

10.    Opposite party No.1 is the bank.  It is argued by the learned counsel appearing for opposite party No.1 that the bank is not under obligation to get the policy renewed.  In support of his contention he filed Ex.B19 arrangement letter between the complainant and opposite party No.1 bank where in clause 6, it is stated that the renewal of the policy should be done by the borrower.  The learned counsel also cited a decision of National Commission in First Appeal No.272/2010 (Shri Subhash Chand Jain, Late Shri Hiralal Jain, United India Insurance Company Limited and Bank of Maharashtra).  Where in it is held that it is not obligatory of the bank to get policy of the borrower renewed.   Merely because opposite party No.1 bank did not send premium to renew the policy to opposite party No.2, it cannot be held responsible.  Ex.A2 policy was issued by opposite party No.2 Insurance Company.  The stock in shop of the complainant was damaged due to floods on 02-10-2009 when the policy was in force.  The opposite party No.2 refused to pay the amount to the complainant.  There is deficiency of service on the part of the opposite party No.2. 

11.    In the result, the complaint is partly allowed directing the                                      opposite party No.2 to pay an amount of Rs.1,70,000/- to the complainant along with cost of Rs.500/- within one month from the  date of the order.  The complaint against opposite party No.1 is dismissed.

        Dictated to the stenographer, transcribed by her, corrected and pronounced by us in the open bench on this the 18^th day of January, 2012.

  Sd/-                                  Sd/-                                   Sd/-        

MALE MEMBER                      PRESIDENT                 LADY MEMBER

                                 APPENDIX OF EVIDENCE

                                    Witnesses Examined

For the complainant : Nil                 For the opposite parties : Nill

List of exhibits marked for the complainant:-

Ex.A1        New India Assurance Policy No.610702/48/08/34/0000114.

Ex.A2.       New India Assurance Policy No.610702/48/09/34/00000132.

Ex.A3                Final Letter dated 25-03-2010.

Ex.A4        Photo copy of Mantralayam Forecast issued by Junior Engineer, Mantralayam, dated 30-11-2009.

List of exhibits marked for the opposite parties:-

Ex.B1                Photo copy of  Agreement of Loan cum Hypothecation.

Ex.B2                Statement of Account of State Bank of India, Mantralayam,

                Account No.11296441297 dated 03-06-2010.

Ex.B3                Photo copy of D.D.No.791558 for Rs.60,523/-

dated 01-10-2009.

Ex.B4                Statement showing the Transfer Transactions of State

Bank of India, Mantralayam, dated 01-10-2009.

Ex.B5                Photo copy of Letter dated 01-10-2009.

Ex.B6                Photo copy of Letter dated 04-12-2010 of State Bank of

                India, Adoni.

Ex.B7                Certificate issued by Thasildar, Mantralayam,

dated 17-06-2010.

Ex.B8                Letter dated 18.04.2010 addressed to Regional Manager,

                New India Assurance company Limited, Anantapur.

Ex.B9                New India Assurance Policy

                No.610702/48/08/34/00000114.

Ex.B10       New India Assurance Policy

                No.610702/48/09/34/00000132.

Ex.B11       Fire Claim Form of New India assurance Company Limited.

Ex.B12       Survey Report dated 07-01-2010.

Ex.B13       Letter of New India Assurance Company Limited

dated 25-03-2010.

Ex.B14       Photo copy of Postal Acknowledgment.

Ex.B15       Letter dated 09-10-2009 Policy details issued by Branch

                Manager, New India Assurance Company Limited, Adoni.

Ex.B16       Photo copy of New India Assurance Company Limited,

                Adoni Renewals for the month of September, 2009.

Ex.B17       Photo copy of Letter dated 02-10-2009.

Ex.B18       Photo copy of Daily Eenadu News Paper dated 02-10-2009.

Ex.B19       Photo copy of Arrangement Letter dated 29-12-2007.

Ex.B20       A Letter given by the owner of the house bearing

No.21/143-7-1 namely Mr.Karur Muralidhar, Adoni with

regard to the tenancy of the Branch Manager D.V.R.Chary

at Adoni dated 26-02-2011.

Ex.B21       A Letter addressed by the SBI Life Insurance for the renewal premium of the owner of the house bearing

                No.21/143-7-1 namely Mr.Karur Muralidhar,

dated 26-02-2011.

Ex.B22       Photo copy of BSNL Telephone Bills stands in the name of

                the New India Assurance Company Limited at the

                residency of D.No.21/142-7 S.K.D.Colony Adoni for the

                Office Telephoen No.221538 (Number in 9).

  Sd/-                                  Sd/-                                   Sd/-        

MALE MEMBER                 PRESIDENT                   LADY MEMBER

    // Certified free copy communicated under Rule 4 (10) of the A.P.S.C.D.R.C. Rules, 1987//

Copy to:-

Complainant and Opposite parties  :

Copy was made ready on             :

Copy was dispatched on               :